Labor unrest threatens to drag on Korea's manufacturing growth momentum

Korea’s manufacturing sector faces mounting risks of losing growth momentum, as extraordinary earnings in the semiconductor industry fuel a wave of aggressive wage demands from unions across other sectors. What began as isolated wage negotiations among a handful of chipmakers has rapidly evolved into a broader “compensation war,” raising concerns that the country’s industrial ecosystem could be fundamentally undermined. At the center of the controversy is Samsung Electronics, whose union has threatened to launch a strike later this month unless the company removes its cap on performance-based bonuses, mirroring a precedent set by SK hynix last year. Both firms have posted record-breaking earnings amid a global boom in artificial intelligence, which has sharply driven up demand for memory chips. The surge in profitability has, in turn, intensified calls for greater employee compensation. The dispute at Samsung has drawn rare public criticism from within the government. President Lee Jae Myung and Industry Minister Kim Jung-kwan have both voiced concerns that the union’s demands